WASHINGTON — The Financial Industry Regulatory Authority has censured and fined Merrill Lynch, Pierce, Fenner & Smith Inc. $500,000 for failing to establish and maintain written supervisory procedures to ensure that its representatives considered customers’ state income-tax benefits in their suitability analyses of 529 college saving plans.

FINRA found that from June 2002 through February 2007, Merrill required its registered representatives to consider potential tax benefits offered by a state in which a client resided as one of a variety of factors before recommending an out-of-state plan.

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